From Michael Sandel's book, Justice: What's the Right Thing to Do?
Too great a gap between rich and poor undermines the solidarity that democratic citizenship requires. Here's how: As inequality deepens, rich and poor live increasingly separate lives. The affluent send their children to private schools (or to public schools in wealthy suburbs), leaving urban public schools to the children of families who have no alternative. A similar trend leads to the secession by the privileged from other public institutions and facilities. Private health clubs replace municipal recreation centers and swimming pools. Upscale residential communities hire private security guards and rely less on public police protection. A second or third car removes the need to rely on public transportion. And so on. The affluent secede from public places and services, leaving them to those who can't afford anything else.
This has two bad effects, one fiscal, the other civic. First, public services deteriorate, as those who no longer use those services become less willing to support them with their taxes. Second, public institutions such as schools, parks, playgrounds, and community centers cease to be places where citizens from different walks of life encounter one another. Institutions that once gathered people together and served as informal schools of civic virtue become few and far between. The hollowing out of the public realm makes it difficult to cultivate the solidarity and sense of community on which democratic citizenship depends. (Sandel, Michael. Justice: What's the Right Thing to Do?, Farrar, Straus and Giroux.)
'The hollowing out of the public realm.' As government is increasingly viewed as 'the problem', rather than part of our society that provides governance and contributes to the social fabric, we are reaching that condition.